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How Can You Get Affluent Consumers to Spend?

March 20th, 2013 :: Rieva Lesonsky

By Rieva Lesonsky

Unity Marketing’s latest Luxury Consumption Index, which measures the spending plans of affluent Americans, shows that after a surge of optimism in October leading up to the November 2012 election, wealthy consumers are getting cautious again. The LCI lost 19.4 points in January–its second biggest loss since the first quarter of 2008.

The LCI measures the optimism that affluent consumers feel about the state of the economy in general as well as their personal financial situation. Affluent consumers are defined as the top 20 percent of U.S. households based upon income; this demographic accounts for more than 40 percent of all consumer spending, so their plans are crucial to business growth.

“Affluent consumers are starting 2013 with a dismal view of the overall economy and their personal financial situation,” says Pam Danziger, president of Unity Marketing. Here’s a closer look:

Skeptical About Economy: Before the election, 37 percent of affluents felt the U.S. economy was improving, but in January, just 29 percent did. Although this is still higher than the 25 percent average throughout 2012, it’s not exactly a vote of confidence in the nation’s future.
Pulling in the Purse Strings: More than one-quarter (28 percent) of affluents say their spending on luxury will decline over the next 12 months; in October, just 18 percent said they planned to cut back.
Personally Pessimistic: The largest share of affluents since the recession believe they will be worse off financially 12 months from now. “Typically affluents are an optimistic bunch,” Danziger says. “However, in the latest survey nearly one-fourth (22 percent) predict that they will be worse off in the next 12 months as compared to today.” This is the highest this measure has been since the depths of the recession in 2008.

What does the poor outlook mean for your business? Tom Bodenberg, Unity Marketing’s chief consumer economist, offers this advice: Reposition luxury goods as a value proposition.

“That means to keep the luxury image and connotations (advertising creative, packaging, media and service), but communicate (in a very implied, almost one-to-one way) affordable pricing,” he explains.

Your goal, Bodenberg says, should be an “almost subliminal” positioning of value. “The current cultural climate can’t support showy displays of luxury,” Bodenberg warns. Affluents still want brands that offer quality and value, but they don’t want to trumpet the luxury factor—instead, they want to feel that they’re making smart buying decisions.

Image by Flickr user (Creative Commons)

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Tags: Marketing, niche marketing, sales process, small business
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Web.com Small Business Toolkit: Brilliant Businesses Contest (Video Contest)

March 19th, 2013 :: Maria Valdez Haubrich

Brilliant Businesses Contest

Up to your neck in expense receipts and other tax documents? After you’ve done your homework and checked out My Corporation’s Small Business Tax Guide and Notable Tax Changes for 2013, celebrate your business by entering the Brilliant Businesses video contest sponsored by My Corporation. Simply submit a video of two minutes or less explaining your business, what you do, or what makes your business unique. Think of it as a commercial for your business. You have a chance to win $1,500 and have your business featured on the home page of the website. Don’t delay: The deadline for entries is March 29, 2013.

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Tags: Resources, small business, small business contests, Videos
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Restaurant Owners Are Bullish on Their Industry

March 19th, 2013 :: Karen Axelton

By Karen Axelton

Restaurant owners are feeling optimistic heading into the spring and summer seasons, and The National Restaurant Association’s latest Restaurant Performance Outlook reflects that enthusiasm, reaching a five-month high in the latest survey in January.

Restaurateurs’ outlook for same-store sales, capital spending and the economy as a whole all improved in January, pushing the RPI (a monthly composite index that tracks the health of the U.S. restaurant industry) to 100.6, up 1.0 percent from December and its highest level since August 2012.

An RPI above 100 means key industry indicators are in a period of expansion; an RPI below 100 means key industry indicators are contracting. The Index measures two components – both the Current Situation and the Expectations.

The Current Situation component measures current trends in same-store sales, traffic, labor and capital expenditures. The Expectations Index measures restaurant owners’ six-month outlook for same-store sales, employees, capital expenditures and business conditions. The Current Situation index was 99.7 percent, while the Expectations Index was 101.6—both an increase from the prior month.

Although there was a lot of uncertainty at the end of 2012 during the “fiscal cliff” standoff in Congress, restaurant operators’ outlook for sales growth has improved since then. Forty-six percent of restaurant operators believe they will have higher sales in six months than during the same period in the previous year. That’s an increase from 37 percent last month, and the highest level measured in seven months. Meanwhile, just 17 percent of restaurant operators believe their sales volume in six months will be lower than it was during the same period in the previous year—about the same as the 16 percent who felt that way last month.

Restaurant operators have a net positive outlook about the overall economy for the first time in four months. Thirty percent of restaurant operators say they expect economic conditions will improve in six months, up from just 17 percent last month. Twenty percent say they expect economic conditions to get worse in the next six months—a decline from 29 percent who said this last month.

Restaurant owners are planning to put their money where their mouths are, with more of them planning capital spending in the coming months. More than half (59 percent) say they will make capital expenditures for equipment, expansion or remodeling in the next six months, an increase from the 50 percent who reported such plans last month.

Image by Flickr user Willem! (Creative Commons)

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Tags: economy, Marketing, restaurants, small business
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America’s Stressed Out. Here’s How You Can Help (and Profit)

March 18th, 2013 :: Rieva Lesonsky

By Rieva Lesonsky

When you think of “stressed-out” consumers, do you picture a frazzled CEO rushing from meeting to meeting while answering emails on one smartphone and holding a conversation on another? Well, you might need to refresh your visual to include a stressed-out teenager. That’s right: According to a new study from the American Psychological Association (APA), younger people are more likely than older ones to report high stress levels.

The study, Stress in America, found that while Americans of all ages report higher stress than they think is good for them, Millennials (ages 18 to 33) and Gen Xers (ages 34 to 47) reported the highest average stress levels.

On a 10-point scale where 1 is “little or no stress” and 10 is “a great deal of stress,” both Millennials and Gen Xers report an average stress level of 5.4. That’s much higher than Boomers’ (age 48 to 66) average stress level of 4.7 and Matures’ (age 67-plus) average stress level of 3.7.

Of course, you can’t avoid stress entirely, so the study asked respondents how much stress they felt was healthy, then measured the difference between what they saw as “healthy stress” and what they actually experienced. Younger generations had a bigger gap: The difference between Millennials’ stress levels and their perception of healthy stress was 1.4 points, compared with 1.6 points for Gen X, 1.3 points for Bommers and 0.7 points for Matures.

Stress is on the rise for everyone: Thirty-nine percent of Millennials say their stress has increased in the last year, as do 36 percent of Gen Xers, 33 percent of Boomers and 29 percent of Matures. But what’s stressing us out differs from generation to generation. Not surprisingly, work, money and job stability are the biggest sources of stress for Millennials and Gen Xers, while health issues affecting themselves and family members are the biggest stressors for Boomers and Matures.

In the past five years, a majority of all age groups have tried to reduce their stress, but while Boomers and Matures are succeeding fairly well at doing this, 25 percent of Millennials and Gen Xers admit they are falling short. They’re also more likely to use unhealthy behaviors, such as drinking, smoking or overeating, to manage stress. Interestingly for businesses, 19 percent of Millennials and 13 percent of Gen X said they shop to manage stress.

What does this trend mean to you?

A marketing message emphasizing how your product or service can lessen stress, help manage stress, or be a well-deserved reward for a stressful day will resonate with all age groups.
However, be aware of the different types of stress affecting different age groups. Work-related stress is a hot button for younger consumers, while health and wellness are trigger issues for older ones.
Make sure your customer service creates less, not more, stress for your clients. If buying from you is easy and pleasant, they’ll come back again and again.

Image by Flickr user BLW Photography (Creative Commons)

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Tags: Generational Marketing, Marketing, sales process, small business
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How to Reach Niche Markets on Social Media

March 15th, 2013 :: Rieva Lesonsky

By Rieva Lesonsky

If your small business is targeting niche markets such as specific minority groups, age groups or other demographics, it’s important to know what social media tools these individuals are likely to use. New research from the Pew Research Center’s Internet & American Life Project examined what social media networks are most popular with different user groups. Here’s what they found:

Overall, social media use is widespread. More than two-thirds (67 percent) of all Internet users use at least one social networking site. Those 18-29 are the most likely of any age group to do so (83 percent), but even among the 65-and-up age group, nearly one-third (32 percent) use social media. Women are more likely than men to use social media, and urban residents are more likely than rural Internet users to do so.

What sites are most popular? Pew took a look not only at the “biggies,” but also at some up-and-comers.

Facebook users

Facebook is still the most popular social networking platform, with two-thirds of online adults on the site. Women are more likely than men to be Facebook users (72 percent vs. 62 percent), and the 18-29 age group is most likely to use it (86 percent).

Twitter users

Twitter is showing steady growth, with the percentage of Internet users who use this social media site doubling since November 2010, to 16 percent. People under 50, and especially those 18-29, are more likely to use Twitter. Urban residents are more likely than both suburban and rural residents to use Twitter. African-Americans are the most frequent users of Twitter, with 26 percent reporting they use it, compared to 14 percent of white Internet users and 19 percent of Hispanics.

Pinterest users

Overall, 15 percent of Internet users use Pinterest, but this site is especially popular with the youngest cohort (18 to 29), those with higher educational attainment, and upper income consumers. Nearly a quarter (23 percent) of Internet users with household incomes between $50,000 and $74,999 use Pinterest; so do 18 percent of people with incomes of $75,000 or above. Women are five times as likely to use Pinterest as men (25 percent vs. 5 percent).

Instagram users

Photo-sharing site Instagram is popular with 13 percent of Internet users overall. Women and younger users (under 50) are the most likely to use it; so are urban dwellers, African-Americans and Hispanics.

Tumblr users

While Tumblr is still the least popular social networking site users were asked about—used by just 6 percent of Internet users—keep in mind that just a few years ago, Twitter had similar numbers. In addition, Tumblr is far more popular among younger users, with 13 percent of 18-to-29-year olds blogging on the site. However, Instagram, which offers similar photo-oriented functionality, has become twice as popular overall in a shorter period of time.

What do these stats mean for your business?

If you’re targeting younger customers, you definitely need to be on social media—and you need to be checking out the newest up-and-coming sites. Whether that’s Instagram, Tumblr or something even newer, take the time to explore it and see if your target customers are there.
No matter who you’re targeting, you probably need to be on Facebook. With even the 65-plus-crowd hanging out here, Facebook is a smart marketing tool for just about every consumer-oriented small business.
Trying to reach women or high-income customers? Get familiar with Pinterest, since a high proportion of those customers spend time there.

Image by Flickr user eldh (Creative Commons)

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Tags: Marketing, sales process, small business, social media
Posted in Business Development, Generational Marketing, Marketing, Sales Process, sales process, Small Business, small business, Social Media, social media | 6 Comments »

Web.com Small Business Toolkit: ProHatch (Crowdfunding)

March 14th, 2013 :: Maria Valdez Haubrich

ProHatch

Interested in crowdfunding to raise capital for your business? Start by educating yourself on this source of startup capital by signing up with ProHatch’s Online Crowdfunding Incubator Program for Small Businesses. The Online Crowdfunding Incubator provides free information and consultation on how to effectively prepare your business to successfully and quickly raise capital through crowdfunding–via social media and other online tools. “Coffee & The Crowd” is an online webinar training program series that gives participants an opportunity to enjoy a free cup of Starbucks coffee, compliments of ProHatch, while being educated on the latest information about crowdfunding and business preparation by both ProHatch and industry experts. Register now; participation takes place this week.

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Tags: Capital Access, crowdfunding, Raising Capital, Resources, small business
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SBA Proposes Changes to 2 Small Business Loan Programs

March 14th, 2013 :: Karen Axelton

By Karen Axelton

Are you seeking financing for your small business? Then you may be happy to know that the SBA is proposing changes to two of its popular small business loans that would result in streamlined paperwork and easier access to capital for small businesses.

“Streamlining and simplifying has been a key focus of our agency over the last few years,” said SBA Administrator Karen Mills. “The changes are the latest steps to reduce paperwork burden, with our eye on the larger goal of expanding access to capital and giving entrepreneurs and small business owners the financial resources to grow and create jobs.”

The proposed changes affect the 7(a) and 504 loan programs, and include:

Eliminating the Personal Resource Test: Small business borrowers will no longer have to obtain a maximum level of personal finance resources in order to qualify for a 7(a) or 504 loan. This will streamline the loan process by eliminating currently complicated regulations lenders use to determine how much collateral is required.

Revising the Rule on Affiliation: This change will expand access to SBA loans to businesses that, under current rules, wouldn’t qualify as small businesses under SBA’s size standards because they are associated with other companies. It also would streamline 504 loan applications and reduce paperwork requirements for both the 504 and 7(a) loan applications.

Eliminating the Nine-Month Rule for the 504 Loan Program: This change would remove a restriction that requires a business to include in its 504 project only expenses incurred nine months prior to submitting the loan application. The new rule would let businesses include expenses incurred at any time—such as costs for projects that were put on hold for more than nine months due to a natural disaster.

The 504 and 7(a) loan programs are the SBA’s biggest lending programs. The 504 program provides long-term fixed asset financing that small businesses can use to buy or improve land, buildings or equipment. The 7(a) loan program helps eligible small businesses access credit when they have been turned down elsewhere.

For more detailed information on the new proposed rules and their benefits, visit http://www.sba.gov/content/revised-oca-regulations-504-and-7a-loan-program.

Image by Flickr user mrsdkrebs (Creative Commons)

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Tags: Capital Access, small business, small business loans
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What You Must Know About Marketing to Baby Boomers

March 13th, 2013 :: Rieva Lesonsky

By Rieva Lesonsky

As they enter their senior years, Baby Boomers are still one of the most powerful consumer demographics in the U.S. What do you need to know to target Boomers today? MediaPost recently spotlighted some research from Navigate Boomer Media on what Boomers are doing, buying and interested in. Here’s where the opportunities are:

Online Marketing

If you’re only marketing to Boomers in the newspaper or print media, you’re missing the boat. You might be surprised to learn that the average Boomer spends more time online than the average teenager (15 hours per week vs. 13 hours). Put your money into online advertising to reach this market.

Transition Time

Baby Boomers are currently experiencing huge life transitions as they enter their 50s and 60s. If you want to capture their emotions during these times, Navigate Boomer Media advises your marketing should include one or more of these three messages:

We understand you.
We make your life easier.
We make your life better.

Wealth Transfer

Baby Boomers will be inheriting money from their parents and will spend it on luxuries including physical rejuvenation and health-related costs such as home gyms, trainers and spa visits; luxury travel; luxury cars (including Porsche, Mercedes and Corvette) and second homes.

Empty Nesters

As their children move out, Boomers will take advantage of the empty nest to pursue their passions, including traveling, pursuing education and volunteer opportunities, starting a business, and remodeling or redecorating the home, often including a home office. Many will also turn to pets (especially dogs) for companionship.

Boomers as Caregivers

With their parents living longer, many Boomers will find themselves in the unusual situation of caring for aging parents long past the time when prior generations were doing so. This creates opportunities for businesses that provide them with support, time off, or pampering to rejuvenate them to face the challenges of caregiving.

Divorce Means Change

For Boomers whose transition includes divorce, demands will include products and services to help them downsize their households and adapt to single life. Sales of condominiums and active adult communities will grow. Wealth management services will be in demand. Travel is popular with this group, with “girlfriend getaways” a hot commodity.

The Grandparent Life

Many Boomers are grandparents, and they’re ready to spend on travel with the grandkids (adventure or education-themed trips and cruises are popular). They also buy books and toys for their grandkids and start savings or college accounts for them.

Menopause and More

Menopausal Boomer women will seek products and services to help them learn about menopause, be comfortable and continue an active lifestyle. Information and education about menopause and solutions for its challenges will be a hot commodity.

How can your business market to Baby Boomers?

Image by Flickr user dannybirchall (Creative Commons)

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Tags: Generational Marketing, Marketing, sales process, small business
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What Are Small Businesses Spending On, and How Does Your Spending Measure Up?

March 12th, 2013 :: Maria Valdez Haubrich

By Maria Valdez Haubrich

How do your small business’s spending habits stack up against those of other entrepreneurs nationwide? PEX Card’s first SMB (Small and Midsized Businesses) Benchmark Expense Survey, conducted in December, has some good and bad news about small business expenses.

First, the bad news: PEX Card found that more than 60 percent of businesses expect their spending to increase in 2013. Among businesses with 25 to 49 employees, that figure was even higher (70 percent). Now, the good news: For more than one-third of businesses, spending is going up because of expenses associated with business growth.

Overall, PEX found, the average SMB spends nearly $800K annually in the categories that were itemized in the survey. Expenses vary widely, though, depending on the size of the company. For those companies with fewer than 10 employees, average expenses were $378K; for companies with over 25 employees, the average was $1.7M.

What’s taking the biggest bite out of small business budgets?

Staffing expenses (which include sales staff compensation and incentives, healthcare coverage and the cost of workers’ compensation insurance) accounted for 50 percent of itemized expenses overall. Those companies with 10 to 24 employees spent the biggest proportion of their expenses on staffing (57 percent).

Where were the biggest cost increases?

More than 50 percent of respondents said that fuel, taxes and licenses increased the most year-over-year.

What are the costs attributed to growth?

The more businesses grew, the more they spent on fuel and insurance. However, the more businesses grew, the less they spent on taxes and licenses, sales and marketing, and office supplies and equipment.

How much is spent on marketing and sales?

This was a fairly large portion of expenses, representing 30 percent of expenses overall. Companies with fewer than 10 employees spent proportionally more on this category (34 percent), while the largest companies (those with 25 or more employees) spent the least (26 percent). However, those companies spent 50 percent of their sales and marketing budget on advertising, significantly higher than the average of 34 percent.

Equipment and office supply expense accounted for 15 percent of expenses overall, but for the smallest companies, it accounted for 20 percent of expenses. Insurance accounted for 14 percent of total expenses; in this case, the largest companies were likely to pay proportionally more for insurance.

See the full survey results to compare how your business stacks up with others like you.

Image by Flickr user Tax Credits (Creative Commons)

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Tags: accounting and taxes, small business
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Does Your Retail Business Need a Mobile App?

March 11th, 2013 :: Rieva Lesonsky

By Rieva Lesonsky

Does your small business need a mobile app? If you’re a retailer or etailer, maybe so. A new study from Flurry measured the time consumers spent using more than 1,800 iOS and Android shopping apps between December 2011 and December 2012.

The study divided apps into five categories:

Retailer Apps (such as Walmart, Target, Macy’s, Victoria’s Secret, Gap, Saks 5^th Avenue)
Price Comparison Apps (such as RedLaser and Grocery iQ)
Purchase Assistant Apps (such as ShopSavvy and ShopAdvisor)
Online Marketplace Apps (such as eBay and Amazon)
Daily Deals Apps (such as Groupon and Living Social)

Time spent on all five types of apps grew quite a bit, but time spent with retailer apps skyrocketed the most (by 525 percent). That percentage far outstrips the overall growth in the use of both shopping apps (274 percent) and apps as a whole (132 percent).

The time consumers spent with Price Comparison and Purchase Assistant apps also grew significantly, by 247 percent and 228 percent, respectively. Even Online Marketplace and Daily Deals apps grew, though at 178 percent and 126 percent, respectively, the growth rate was far less.

The big winner in the growth of app use is retailers. Overall, in 2012 consumers spent 27 percent of app use time on retail apps (up from 15 percent in 2011). By contrast, the share of time spent on Daily Deals shrank from 20% in 2011 to 13% in 2012, and the share of time spent on Online Marketplace apps decreased from 25% in 2011 to 20% in 2012.

Flurry concludes that smart retailers will begin examining their customer relationships through the “mobile-first” lens. The rise in mobile app use—and especially in retail app use—shows that it’s more important than ever to extend your customer relationships to a variety of channels.

Instead of focusing solely on getting customers into your store—or even onto your website—you need to also focus on attracting them via their mobile devices. “In the new mobile app economy, devices are always with you, always on and always connected,” Flurry writes. Yes, 95 percent of sales still occur in physical stores, but mobile allows you to intercept customers in store aisles and affect their purchasing decisions before they ever reach the cash register. Consider tapping into apps that let customers save their credit card info, apps that let them ship an item to their homes, or apps that let them scan an item with their phones to place an order.

How are you using mobile apps to enhance your customers’ retail and e-tail experience?

Image by Flickr user Dru Bloomfield – At Home in Scottsdale (Creative Commons)

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